Business columns: The real villains of foreclosure
Fannie Mae and Freddie Mac own more than half of all U.S. mortgages and pay some of the nation’s largest banks to service them, said Stephen Meister in the New York Post.
Stephen MeisterNew York Post
Who’s to blame for the still-unfolding foreclosure crisis? asked Stephen Meister. Start with Fannie Mae and Freddie Mac, the government-owned mortgage giants. The two agencies own more than half of all U.S. mortgages and pay some of the nation’s largest banks to service them. For a fee, the banks collect mortgage payments, maintain document files, and, when necessary, handle foreclosures. In all such endeavors, “they do what Fannie and Freddie tell them to do.”
It’s Fannie and Freddie that set tight deadlines for executing foreclosures and that penalize banks when they fall behind schedule. The agencies also steered banks to the notorious “foreclosure mill” law firms that “cut corners and filed all kinds of questionable court papers.” That’s not to say we should ignore the abuses of banks and law firms in this mess, but why is the FBI investigating only the financial industry for possible criminal violations? We shouldn’t let “big-government activists” escape blame for mortgage problems that “they played a huge role in creating.”